US Tariff of 12.5% Won't Seriously Impact Nigeria - CPPE

The Centre for the Promotion of Private Enterprise (CPPE) says the United States' decision to impose a 12.5 percent tariff on imports from Nigeria is not likely to hit Nigeria's economy hard.

The think tank shared this in a statement from its Chief Executive Officer, Muda Yusuf, on Sunday. He pointed out that Nigeria's petroleum exports are mostly exempt from tariffs, and the share of Nigerian exports to the US is small.

On Friday, the US government announced it would impose a 12.5 percent tariff on imports from Nigeria. They said this decision is part of a new trade measure aimed at countries that do not stop goods made with forced labour from entering their markets.

CPPE explained that this tariff is part of a broader change in US policy to protect local industries and boost manufacturing. They noted that this new tariff follows a similar policy introduced by former US President Donald Trump, but it is now under a different legal framework.

"CPPE’s assessment is that the new tariff regime represents a continuation of the Trump administration’s reciprocal tariff policy, albeit under a different legal framework.

"Following the judicial invalidation of the earlier reciprocal tariffs, the current measures appear to have been restructured under Section 301 of the U.S. Trade Act, with allegations relating to forced labour providing the statutory basis for their implementation," CPPE said.

They added that even though the legal basis has changed, the goal is still to protect US industries, improve American manufacturing, and support broader US trade and economic interests.

Impact on Nigeria

The think tank said that the direct economic effects for Nigeria would be limited. Most of Nigeria's exports to the US are petroleum products, which are not affected by the tariffs.

"Nigeria’s exports to the United States are heavily concentrated in crude oil, liquefied natural gas and other petroleum products, which account for more than 80 percent of Nigeria’s merchandise exports to the US.

"These products have been exempted from the tariff measures, leaving the bulk of Nigeria’s exports unaffected," the agency said.

CPPE also pointed out that the US is not Nigeria’s top export destination. Data from Nigeria’s first quarter of 2026 shows that exports to the US made up only 5.56 percent of total exports, worth about N21.6 trillion.

In comparison, India took 13.09 percent of Nigeria’s exports during that time. France followed with 9.29 percent, the Netherlands with 9.22 percent, and Spain with 7.68 percent. This places the US as Nigeria’s fifth-largest export market.

According to CPPE, these trade patterns lower Nigeria’s risk from the new tariffs. They mentioned that the tariffs will only have a slight effect on Nigeria’s export earnings, foreign exchange income, and overall economic performance.

"While some non-oil exporters, particularly in agriculture and manufacturing, may see less competitiveness in the U.S. market, the overall impact on Nigeria’s export earnings, foreign exchange receipts and macroeconomic performance is expected to be modest," the body said.

The group added that this situation shows a wider shift toward protectionism in global trade and greater use of trade policy to support domestic economic goals.

Solution

CPPE urged Nigeria to speed up efforts to diversify exports, enhance manufacturing competitiveness, add more value locally, and take full advantage of the African Continental Free Trade Area.

They also called on the government to boost labour standards, improve supply chain transparency, and engage with the US to lessen the impact of these measures on affected exporters.

CPPE said Nigeria's bigger challenge is dealing with a global trading environment that is becoming more fragmented and protectionist, rather than just the immediate export concerns.

"Overall, while the new US tariffs have raised understandable worry, their direct economic effects on Nigeria should not be exaggerated.

"The bigger challenge is not just about losing export opportunities right away, but managing an increasingly fragmented and protectionist global trading environment," the think tank said.